The Forward Look—European and UK Credit Views: Q3 2026
Key Takeaways
Green shoots of growth are emerging despite geopolitical tensions—but can it turn into something more concrete?
Inflation remains a key risk as producer prices rise and drought conditions restrict supply movements.
Policy progress is gaining traction, but implementation remains limited to date.
Spreads remain at historically tight levels, albeit off their lows. However, longer duration yields have risen on the expectation of rising inflation and policy rate rises.
Forward View
Growth Outlook: What’s the Time, Mr. Wolf?
Like the children’s game, “What’s the time, Mr. Wolf?”, it feels like the European economy is trying to slowly creep along forwards, while the wolves of geopolitical tensions and climate are at risk of suddenly turning around and stopping everything. Uncertain consumers are curbing spending. However, the investment capex story keeps pushing through a slow return-to-growth story. Manufacturing purchasing managers’…
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